Photo: Duc Anh
$15.2 million in taxes must be paid within eleven months of end of August or Viet A will be held responsible.
The Taxation Bureau of the central Quang Nam province has accepted Viet A Bank as the tax debt guarantor of the Phuoc Son Gold Company.
Phuoc Son’s tax repayments of VND334 million ($15.2 million) must be made within eleven months from the end of August. If not, Viet A Bank will be responsible for the tax debts.
The Phuoc Son Gold Company has been recently restructured and will be back in business at the beginning of August.
Meanwhile, there have been no recent activities in the tax debts of the Bong Mieu Gold Company, which owes VND100 billion ($4.5 million).
On July 13 Mr. Ngo Bon, Director of the Quang Nam Department of Taxation, said there were signs that these companies had sold gold to their parent companies at less than market prices while materials were imported at higher prices, to evade tax.
“The tax debts have been incurred not only because of the decline in gold prices and loss-making business activities but also because of poor management,” he added.
Bong Mieu’s tax debts may never be recovered, he said, as it is likely to declare bankruptcy.
It was reported on July 7 that Viet A Bank, which holds 35 per cent of Phuoc Son, had proposed being its tax debt guarantor. According to a statement sent to the Quang Nam Provincial People’s Committee, the bank would be responsible for tax debts if the gold mining company could not pay.
On July 10 Deputy Prime Minister Truong Hoa Binh told local authorities that tax debts must be collected or guaranteed before the two gold mining companies are issued new licenses. He added, however, that there is no general term or policy on debt guarantees. “The term and policy needs to be detailed and there will be sanctions if Viet A Bank and Phuoc Son do not pay the amount owing,” he said.
The Phuoc Son Gold Company and the Bong Mieu Gold Company, under the ownership of the Canadian group Besra, reportedly owe VND430 billion ($19.5 million) in taxes, according to the provincial Department of Taxation.
In addition to having tax debts Bong Mieu Gold was also found to be operating illegally after its license expired last March. Provincial authorities released a statement on June 16 shutting down the company’s operations.
Besra reported losses for Bong Mieu of nearly VND1 trillion ($46 million) and short-term loans of VND2.5 trillion ($112 million) as at June 30, 2014, and with falling gold prices, interest payments on loans and other expenses over the last two years the actual loss may be much higher.
According to the 2015 Board of Directors report from Viet A Bank, released on July 13, Chairman Phuong Huu Viet holds 15.8 million shares in the bank, equal to 5.52 per cent. His niece, Ms. Phuong Thanh Nhung, who stepped down from her position as CEO in May but remains a member of the Board, holds 14 million shares, or 4.02 per cent. Her husband Mr. Tran Viet Anh holds 2.15 per cent.
The total holdings of Mr. Viet and his family stand at 10.69 per cent, according to the report. The Viet Phuong Investment Corporation, which belongs to Mr. Viet, holds another 10.85 per cent.
Viet A Bank’s total charter capital as at the end of 2015 was VND3.1 trillion ($139 million), according to the bank’s annual report. In June 2015 Besra sold 35 per cent of its stake in Phuoc Son Gold to the bank. The deal was to reorganize the gold mining company after it reported accumulative losses of VND352 billion ($16 million) in June 2014, while Bong Mieu lost VND662 billion ($30.1 million).